Newspaper article St Louis Post-Dispatch (MO)

Ex-Employee Sues Ex-Owner of Community Title

Newspaper article St Louis Post-Dispatch (MO)

Ex-Employee Sues Ex-Owner of Community Title

Article excerpt

A former employee of Community Title Co. of St. Louis has sued James P. Davis, who used to own the business. Richard R. Alferman alleges in a federal suit that Davis made improper loans and investments that cost the company's profit-sharing plan thousands of dollars.

Community Title was once the state's biggest title insurance company. In 1993, the Missouri Department of Insurance accused the company of fraud, forgery, conspiracy and untrustworthiness.

Community Title and Davis were vindicated in March 1994 when an administrative judge ruled that they had done nothing wrong. They later sued the department and recovered some of their legal costs.

Davis argued, and the administrative judge agreed, that the department's actions put Community Title out of business. Davis had sold the firm in 1993 to U.S. Title Guaranty, a new company that included his former partners, for $100 plus the assumption of debts.

Last year he sued U.S. Title, trying to get his company back. The lawyer representing U.S. Title, Charles A. Seigel III of Seigel and Wolff, is the same lawyer who filed Alferman's suit.

"We've refused to settle, and he keeps thinking up lawsuits," Davis said of Seigel. "He's engaging in legal terrorism."

Davis said we should ask Alferman, who is a vice president of U.S. Title, who was paying his legal expenses and who encouraged him to file the suit.

"I was encouraged to file by a large number of employees who have been covered (by the profit-sharing plan)," Alferman said. "There were dis cussions for years about the possibility of mishandling of the funds."

He deferred to Seigel on the question of who was paying for the litigation. Seigel, who is seeking class-action status for the case, said he won't discuss fee arrangements.

Davis claimed Thursday that he hadn't seen the Alferman suit. Asked about the allegations of misusing profit-sharing funds, he said, "That's untrue."

The suit charges that the plan lost more than $500,000 by buying debt and equity in First Exchange Corp. and lending money to Donald R. Chilton. Chilton was a former chairman of First Exchange, a bank holding company in Cape Girardeau that collapsed in 1992. In February 1993, on the day Chilton was indicted for bank fraud, he committed suicide.

Last week, Davis filed his own federal suit. He is seeking $36 million from Jay Angoff, director of the state insurance department, and other insurance officials for their actions in bringing the 1993 complaints against Community Title.

THE COFFEE SCENE: Two local entrepreneurs are trying a joint effort. The Clayton location of Caffe Paradiso is setting up a special counter to sell bread and cookies from Great Harvest Bread Co., delivered fresh daily.

"The customer who buys premium bread is the same customer we want," said Harman Moseley of Paradiso, "and we like the way they do business. …

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